Federal Reserve Governor Lisa Cook is fighting the President Donald Trump administration in court after an emergency bid sought to remove her from the central bank ahead of a pivotal interest rate decision.
Cook's Lawyers Warn Of Threat To Fed Independence
In a Saturday filing with a U.S. appeals court, Cook's attorneys urged judges to reject the administration's request for a stay of a lower court ruling that blocked her removal, according to Fortune.
"A stay by this court would therefore be the first signal from the courts that our system of government is no longer able to guarantee the independence of the Federal Reserve. Nothing would then stop the president from firing other members of the board on similarly flimsy pretexts. The era of Fed independence would be over. The risks to the nation's economy could be dire," the filing stated.
Trump Administration Cites Alleged Mortgage Fraud To Justify Removal
Trump's lawyers argued that Cook's alleged mortgage fraud in 2021, claiming two properties as "primary residences" before joining the Fed, calls her trustworthiness into question.
"Her alleged actions indisputably call into question Cook's trustworthiness and whether she can be a responsible steward of the interest rates and economy," the filing said.
Cook denies the allegations and previously sued to block her firing.
U.S. District Court Judge Jia Cobb had ruled the administration had not shown sufficient cause to fire her, emphasizing that misconduct "for cause" must occur while in office.
Bill Pulte Accuses Lisa Cook Of Mortgage Fraud, Sparking Federal Probe
Last week, Bill Pulte, director of the Federal Housing Finance Agency and a Trump ally, accused Cook of improperly claiming multiple homes as her primary residence.
Pulte claimed Cook committed fraud by securing "homestead exemptions" on more than one property and referred the matter to the Justice Department, prompting a federal probe.
He criticized Cook, stating that "financial fraud is a big deal" and highlighting that one of her declared primary residences was being rented out to tenants.
Last month, billionaire investor Bill Ackman urged Cook to address the allegations directly, emphasizing the importance of maintaining the integrity of the financial system.
Sen. Elizabeth Warren (D-Mass.) condemned the move as an "authoritarian power grab," accusing Trump of using Cook as a scapegoat to distract from his economic failures.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
